Indian farm reforms: How both sides faltered

By Chanakya

Over the past fortnight, the agitation against the Centre’s agricultural reforms — led primarily by land-owning farmers of Punjab, but now supplemented by a range of other farmer groups — has assumed a political, economic and regional element. 

The issue has also highlighted the strengths and weaknesses of the two key actors involved in the issue — the government as well as the agitators. What have they done right, and where have they gone wrong?

Take the government first.

The Narendra Modi government did well in turning the crisis presented by the pandemic into an opportunity for reform. Indeed, Indian economic policymaking experience shows that it is in moments of crisis that reforms are most politically feasible, giving room to governments to challenge status quo. 

If it was not for the balance of payment crisis in 1991, it is doubtful if the PV Narasimha Rao-Manmohan Singh duo would have been able to push far-ranging and necessary reforms which liberalised India, integrated it with the world, boosted growth rates, unleashed the animal spirits in the private sector, expanded the middle-class, enriched the government through additional revenues leading to enhanced welfare spending, and lifted millions out of poverty.

But one sector which was largely immune to the trajectory of reforms was agriculture. No agricultural expert can today argue with any justification that status quo is tenable. The structural issues in Indian agriculture need not detain us here — but the mismatch between agriculture’s contribution to GDP and the number of people dependent on it is enough to show that urgent reforms were essential. 

And that is why the Modi government acted with the right intent in reframing how agricultural produce in the country can be procured and traded. 

It broke the monopoly of the mandi system, enabled greater interface between agriculture and industry by allowing structured corporate participation, and increased the freedom and choices available to farmers. This has the potential of enhancing farm incomes, infusing more capital in the sector, enabling diversification and possibly paving the path for the modernisation of India’s rural economy.

But if it was right in its intent, as well as the overall substance of the law, the government faltered in building wider consensus around reforms.

The government clearly underestimated the depth of anger, especially in Punjab, even though it was apparent that given the well-entrenched mandi system and the more widespread procurement of produce at MSP in the state, resistance could be fierce. The Centre’s actions led to the perception of unilateralism and only alienated those sceptical of the reforms further, providing the ground for a sustained movement.

But what about the agitators?

Irrespective of whether one agrees or disagrees with the farm reforms, there is no doubt that the farmers are within their rights to express their opposition to measures which they believe will hurt their economic interests. 

But where the farmers have faltered is in the method and idiom of the protests.

Any interest group in a democracy has the right to oppose the government peacefully and through constitutional methods. But this cannot be at the cost of undermining the rights of fellow citizens. 

To gain leverage in negotiations with the State, protesters have been inflicting costs on society — by blocking highways and the right to free movement and disrupting supply chains and the right to trade. This has not only caused inconvenience but also led to inflationary consequences, the brunt of which is borne by the poor.

Indeed, it is only through this political process of negotiation that both reforms can succeed and interests of those fearful of reforms can be safeguarded. Both the Indian State as well as dissenting citizens are on test.

Image courtesy of (File photo)

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